The bancassurance deal, which is set to run for ten years, is a follow up of a partnership agreement between the two companies in October 2011. The agreement was to grow bancassurance in Indonesia, and has now come into effect a little under a year later.
Speaking about the new partnership, Alan Merten, the CEO and President of Manulife Indonesia was quoted as saying: “I am very pleased that the partnership between Danamon and Manulife is now officially launched! This is another significant step Manulife is taking towards realizing our vision to provide strong, reliable, trustworthy, and forward-thinking solutions to our customer’s most significant financial decisions.”
Manulife Indonesia is a joint-venture between Manulife Financial, and PT Tirta Dhana Nugraha, however Manulife Financial owns an overwhelming 95% of the company. The partnerships marks Manulife Indonesia’s 13th bancassurance agreement with Indonesian banks, with Danamon joining the likes of ANZ, HSBC and CitiBank.
Under this new deal with Danamon, Manulife Indonesia will offer seven products to the bank’s customers. The products will be available at Danamon’s 500+ retail branches across Indonesia, and for the initial transition, Manulife Indonesia have provided 250 specialists and staff to provide advice to customers.
This deal comes as no surprise due to Indonesia’s extremely low insurance market penetration. Henry Ho, Danamon’s President Director, acknowledged the potential Indonesia’s market has: “Many people still don’t have insurance. This is a huge opportunity. One way to drive growth [in fee income] is through bank assurance.”
Danamon has been pursuing bancassurance deals in an effort to “meet our promise in providing Life Time Financial Support through wide range banking product including Insurance and Wealth Management” according to Michellina Triwardhany, Danamon’s Director for Consumer Banking. Following this latest agreement, the bank now boasts two Bancassurance deals. In 2006, Danamon signed a deal with Allianz Life Indonesia. The deal resulted in Allianz providing three bancassurance products to Danamon’s customers.
Speaking about Danamon’s agreement with Manulife Indonesia, Ho said the deal was based “on our [Danamon & Manulife] mutual intention to bring the benefits of world standard insurance and wealth management expertise to a much wider base of customers.”
Manulife Indonesia had a good year in 2011, winning several awards including the Best Life Insurance Company in 2011 in Indonesia from the ABAI as well as a “Very Good” rating for the 6th time from infobank magazine. Combined with Danamon’s equally impressive credentials, including being crowned the Indonesian Bank Loyalty Champion, this new partnership should help Manulife achieve its goal of increasing its premiums by up to 20% throughout this year.